FDIC Sues IndyMac Ex-CEO For Negligence

Originally published on July 7, 2011 9:02 am
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RENEE MONTAGNE, host:

NPR's business news starts with a mortgage lawsuit.

(Soundbite of music)

MONTAGNE: The government has been criticized for not prosecuting bank executives for their role in the financial crisis, but regulators are seeking payback.

Yesterday, the FDIC filed suit against the former chief executive of IndyMac. That's the big mortgage lender seized by the government three years ago. The suit accuses former IndyMac CEO Michael Perry of causing $600 million in losses.

The lawsuit alleges that Perry purchased billions in risky mortgages when he knew the market was unstable and then transferred those mortgages to the bank's own portfolio when he couldn't sell them. Perry's lawyer called the suit baseless. Transcript provided by NPR, Copyright NPR.